Currency markets are treading water in Asian trade as investors digest yesterday’s aggressive burst of volatility. That move saw the US Dollar plunge against all of its major counterparts, handing it the largest one-day loss in almost a year.

The selloff was broad-based, with the benchmark unit falling against all of its G10 counterparts. Previously inverse relationships between currency pairs pitting greenback against “risk-on” alternatives like the Australian Dollar and “risk-off” ones like Yen broke down as the non-USD majors moved higher in unison.

The drop tracked a dovish shift in priced-in US monetary policy outlook as Fed Funds futures erasedbets on further interest rate hikes in 2016. No singular catalyst stands out as the trigger for the readjustment, suggesting it may have reflected pre-positioning ahead of Friday’s release of January employment data.

Looking ahead, theBank of England policy announcement is in focus. The release of an official statement as well as minutes from the meeting of the rate-setting MPC committee will be accompanied by the publication of the quarterly Inflation Report. This often coincides with inflection points in the central bank’s trajectory.

The markets are positioned for a dovish outcome. The priced-in rates 12-month BOE rates outlook implied in overnight index swaps (OIS) has dropped to the lowest level since May 2013. In fact, the baseline view now sees a 64 percent probability that rates remain unchanged and a 36 percent probability of a 25 bps cut by February 2017. That is a far cry from a baseline view pricing in at least one 2016 rate hike as recently as a month ago.

British Pound positioning suggests this dovish shift has entered the exchange rate to a significant extent. Indeed, the latest CFTC Commitment of Traders report shows Sterling speculative positioning is at its most net-short since July 2013.

This makes a dovish surprise unlikely. For that, officials would probably need to explicitly signal an about-face reversal from their preference for a hike as the next policy move, shifting the conversation from speculation about timing to the direction of policy itself.

On the other hand, the sharp skew in positioning warns that even a modestly hawkish tone – which could amount to something as mild as the suggestion that 2016 “liftoff” remains a possibility – may send the UK unit sharply higher. Given the markets’ voracious appetite for stimulus, such a result might also hurt risk appetite and punish sentiment-linked FX like the Aussie and Kiwi Dollars.